A reverse mortgage loan can be quite beneficial for the financial security of qualified seniors who have sufficient equity in their homes. The funds from a reverse mortgage loan can be used to supplement retirement income, pay off an existing mortgage and other debt, pay for medical care, prescriptions, in-home care, make home improvements or just to save for that rainy day fund.

Since not all reverse mortgage companies provide the same level of service, it is important that you choose your lender carefully and weigh all of your options. 

Check Reverse Mortgage Rates/Costs

The Mortgage Insurance Premium (MIPs) is the same for all lenders as it is required by the HECM program guidelines, but origination fees, interest rates, closing costs and servicing fees may differ.

Side-by-side comparisons may help you save money. Reverse Mortgage counselors will be able to provide this information if you have questions.

Know the Total Annual Loan Cost (TALC) Rates

Clearly understanding what requirements need to be followed to prevent the reverse mortgage loan from becoming due is important. Counselors and Lenders will be able to explain the Total Annual Loan Costs (TALC) that show the estimated annual cost of the loan.

Understand Your Loan Options

If you are planning to use the proceeds from your reverse mortgage loan for home repairs or improvements, contact your local Area Agency on Aging to see if you may qualify for loans for home repairs or help paying property taxes. Visit www.eldercare.gov for more information at Area Agencies on Aging.

The Federal Housing Administration (FHA) keeps an updated list of FHA-approved reverse mortgage lenders. In addition to the costs and value of a reverse mortgage loan, choosing a lender with strict adherence to professionalism will make your lending process as smooth as possible.